What’s a Good Cost Per Lead for Contractors?

For contractors, a good cost per lead is whatever your job economics can carry, and the spread is enormous: small-repair trades often see leads in the tens of dollars, while remodelers and builders chasing five- and six-figure projects commonly pay well over a hundred per inquiry and are happy to. The only universal rule is that lead cost must be judged against job value and close rate together.

Ask ten contractors what they pay per lead and you will get ten numbers that are all “true” and all useless to each other, because a handyman, a roofer, and a kitchen remodeler are running three different businesses that happen to share a category. So instead of pretending there is a benchmark, here is how to find yours.

Why remodel leads cost more than repair leads, and should

Lead prices follow job value the way rent follows neighborhoods. A $400 gutter repair and a $90,000 kitchen sit in the same “contractor” bucket, but every advertiser in the auction knows what each customer is worth, and bids accordingly. High-ticket trades also have longer sales cycles and fussier customers, so a remodeling lead is really a seat at a months-long table, not a phone ringing with work. Paying a lot for that seat is rational. Paying repair-lead prices and expecting remodel-quality inquiries is how contractors end up convinced that “marketing doesn’t work in our trade.”

Season and territory push the numbers around too. Storm season floods roofers with cheap intent, then winter dries it up. A contractor in a growing suburb pays a different auction price than one in a saturated metro. And exclusive leads from your own website and ads behave nothing like shared leads resold to three or four competitors, where the quoted price per lead hides a much higher price per actual job, because you win fewer of them and every one becomes a bidding war.

Do the napkin math for your trade

Three numbers, one napkin:

• Average job value and gross margin. What does a typical won job bring in, and what do you keep?
• Close rate on leads. Of ten inquiries, how many become signed work? Be honest; for many contractors it is two to four, better for referrals, worse for cold platform leads.
• Allowable cost per job. Decide what share of a job’s margin you will spend to win it. Divide by your close rate and you have your maximum sane cost per lead.

Worked example, with made-up-by-you numbers: if your average bathroom remodel keeps you $8,000 in margin and you will spend up to a tenth of that to win one, you can pay $800 per booked job. Closing one lead in four means you can pay up to $200 per lead and be fine. Suddenly the “expensive” leads look cheap and the cheap ones look like noise. Run the same math on your smallest job type and you will also see why blasting one budget at every service you offer rarely works.

What this means when you evaluate an agency

Any agency pitching contractors should ask for your job values and close rates before quoting expected results. If they lead with a cost-per-lead promise instead, they are selling you a number they can manufacture: loose form fills, unqualified callers, and “leads” who wanted a trade you do not offer all pad the count beautifully. Make them report cost per qualified lead and cost per booked job, and make them define “qualified” with you in writing. It is also worth understanding how the fee structure shapes incentives, because pay-per-lead pricing, retainers, and percent-of-spend each push agencies toward different behavior; our breakdown of how marketing agencies actually price explains who each model really serves, and the pillar guide to agency costs puts real numbers on the fees themselves.

The pattern we see in the trades

Twin Shores works with contractors and remodelers, several of them family shops in their second generation, and the pattern repeats: the businesses that win are not the ones with the cheapest leads. They are the ones with exclusive leads, a fast phone, photos of their actual work, and a follow-up system that keeps a slow-maturing remodel inquiry warm for the months it takes to sign. Cheap leads with slow follow-up lose to expensive leads with fast follow-up every single time. If you want to see how we build that machine for the trades, our contractor and remodeling marketing page shows the whole system, economics included.